The European Commission announced Tuesday that it was putting 1.2 billion euros ($1.56 billion) into renewable energy demonstration projects but had found no carbon capture ventures to back.

EU Climate Change Commissioner Connie Hedegaard said the funding came in part from the EU's carbon trading system, so that in effect polluters were paying, while the private sector would provide another 2.0 billion euros investment.

"This will help the EU keep its front-runner position on renewables and create jobs here and now, in the EU," Hedegaard said.

The "aim is to successfully demonstrate technologies that will subsequently help scale-up production from renewable sources across the EU substantially."

Construction work on the 23 projects will generate several thousand jobs and require 1,000 full-time employees once operational.

Hedegaard said it was unfortunate that no Carbon Capture and Storage (CCS) projects, where CO2 gas blamed for global warning is collected and stored to minimise the environmental impact, made it to the funding stage in this round.

The 275 million euros set aside for CCS will accordingly be available in a second programme, she added.

EU leaders agreed in 2007 to have 12 CCS demonstration projects in operation by 2015 as the bloc seeks to take the lead in combatting climate change.

Those plans suffered a serious setback earlier this month when the world's biggest steelmaker ArcelorMittal said it was withdrawing from the Uclos CCS project at its plant in Florange, France.

Its decision meant that all EU CCS projects mooted for this year had failed to make the grade.